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The S&P 500 – 2017 vs. 2018

  |   Investment Planning

What a difference a year makes!  It was clear to most of us that 2018 was not a great year for the S&P 500 and the stock market in general.  One reason it felt worse than it actually was is because our memories are short.  We tend to think that what happened in the most recent past will keep happening (a phenomenon known as recency bias).  When it doesn’t, what would otherwise be considered relatively normal activity feels like a kick in the stomach.

Some interesting data points

S&P Performance

What should you take away from the information provided?

  • First, the disparity is not all that unusual. The ups and downs are a normal function of a market.
  • Second, if looking at your year-end investment account statements or the chart above is panic inducing, you should re-evaluate your allocation to stocks.
  • Third, don’t read too much into it. Yes, it is interesting (at least to me) and it might make for good conversation, but it really is just a few interesting comparison points (and ones I cherry-picked at that) to remind us that we never know what will happen from one year to the next.  Making long-term decisions about your portfolio based on charts like this will only get you into trouble.


And, for everyone who assumed that January and February of 2019 would be a continuation of the last quarter of 2018…they were wrong.  The S&P 500 gained 8% in January and another 3% in February.

AUTHOR - Tammy Wener

As co-founder of RW Financial Planning, Tammy oversees the financial planning process for all clients and manages the day-to-day operations of the firm. She truly enjoys getting to know her clients and is not shy about asking questions. Tammy has 15+ years of experience in the financial planning and estate planning fields and has worked with a broad range of clients including: couples simultaneously planning for financial independence, caring for their parents, and saving for college; newly widowed and divorced women looking to become more financially literate; young couples just starting out; families juggling the demands of a child with special needs; and financially independent individuals and couples exploring “what comes next.”